What started out as an online bookstore is now not only the largest online retailer but also the company to beat in the digital world. Amazon is building a river of digital services across the industry board including retail, music, entertainment, movies, mobile applications, storage and e-commerce.
Amazon CEO Jeff Bezos has shown no hesitation to enter a new industry. That makes Amazon an exciting company to follow and, from a competitor's standpoint, one to be afraid of.
With the Amazon Kindle, Audible.com, Amazon mp3, the Amazon App Store, Amazon Instant Video with Amazon Prime, the recently announced Amazon Cloud Player, and, of course, Amazon.com itself, the company is becoming a go-to source for online shopping and entertainment.
Amazon Cloud
I've been testing out the Amazon Cloud since last week and, so far, I'm very impressed. A simple (and free) download is all that's required to get started. Then just upload your media files. I've found the music storage alone to be well worth the download. The Cloud lets you access your music on any computer or any android device. So I was able to delete music files from my Droid, freeing up much needed space.
With the free version of the Amazon Cloud Drive and Player, you'll get 5GB of free storage. For more, you'll have to pay. Though right now I have 299 songs on my Cloud and I'm using only 1.3 GB of storage, 26% of the alloted 5 GB.
By the way, what is a "Cloud"? A Cloud is basically a hard drive in the sky, a hard drive on the internet that users can access from any computer, or compatible mobile device, with an internet connection without hauling anything around. In a way, your email service is like a cloud. Gmail serves as a cloud for your email by storing your messages on the web and thus being accessible from many devices with an internet connection.
The Cloud lets you store Music, Documents, Pictures and Videos. Whether it was purchased from Amazon or not. Here's a breakdown of the additional storage plans, up to 1000 GB of space.
For more on the Amazon Cloud, click here.
Amazon Prime & Instant Video
Amazon Prime membership offers users on Amazon.com unlimited free two-day shipping for $79 per year, billed annually. That was until Amazon announced in February that Prime users would also have access to unlimited, commercial-free instant streaming of 5,000 movies and TV shows.
Amazon Instant Video offers little differentiation from Netflix with a smaller library but the bonus of free two-day shipping. Though Amazon claims 5,000 titles are available, I'm only able to see around 3,000 titles including TV and movies. I'll keep checking on this.
Free shipping and a library of videos to stream instantly to your computer or TV for about $7 per month is a solid deal, especially for frequent amazon.com shoppers. Price compares to Netflix, though Big Red is billed monthly. Netflix offers an unlimited streaming plan (though no discs by mail) for $7.99 per month.
Audible.com
Your favorite books. On audio. I've tested this out, too, though I haven't committed just yet. I enjoyed my free two-week trial period, downloaded a couple of audiobooks. The service also offers magazines, radio shows, podcasts, stand-up comedy and speeches.
How it works: Audible.com offers two plans: Gold and Platinum. With either subscription, you receive credits that can be used to purchase audiobooks or other audio content. Both plans have a monthly and annual option.
Audio files purchased from Audible.com can be accessed from your computer, burnt to a CD, played with the Audible.com app, as well as iPod and more than 500 other devices per Audible.com. For a list of compatible devices, click here (you may have to navigate to the "comaptible devices" window).
Living Social & Woot
In December of 2010, Amazon made a $175 million investment in local-deals site LivingSocial. The service operates much in the same way as Groupon, offering heavily discounted items and services.
"To be the biggest player in the local commerce space there is no one better to work with than Amazon," LivingSocial CEO Tim O'Shaughnessy said in a statement on the company's website, announcing the investment. "As the social shopping space continues to heat up, LivingSocial is committed to staying focused on providing the high level of quality that consumers and merchants have come to expect when working with us."
LivingSocial does things a little differently, however. Whereas Groupon requires a specific number of people to buy a deal for it to be valid, LivingSocial makes it easy. Buy the deal and it's yours.
But LivingSocial adds another layer to the daily deal. Once you buy a deal on LivingSocial, you'll receive a unique, sharable link. Your deal becomes free when three people buy the deal from your unique link, giving you extra incentive to share the deal. Both Groupon and LivingSocial offer mobile apps to get deals on the go.
Prior to its investment in LivingSocial, in June of 2010, Amazon acquired deal-a-day site Woot. Woot Services, LLC is actually a bunch of sites under one wootbrella. There's the main Woot.com, which operates like Groupon and LivingSocial, offering one deal a day from a variety of sources and services. But its sub-sites offer specific products, like T-Shirts on shirt.woot.com; or kids products on kids.woot.com; or wine on, you guessed it, wine.woot.com; and more.
Woot is a bit of an odd-ball deals site. Maybe Woot CEO Matt Rutledge give you a better idea of what Woot's about, in a letter to his employees:
"We think now is the right time to join with Amazon because, quite simply, every company that becomes a subsidiary gets two free downloads until the end of July, and we very much need that new thing with Trent Reznor’s wife on our iPods," Rutledge wrote in a letter to Woot employees on June 30, 2010.
"Other than that, we plan to continue to run Woot the way we have always run Woot – with a wall of ideas and a dartboard. From a practical point of view, it will be as if we are simply adding one person to the organizational hierarchy, except that one person will just happen to be a billion-dollar company that could buy and sell each and every one of you like you were office furniture."
So that's Woot for you, a site that's 50% humor and entertainment and 50% great deals. It's worth a look. If nothing else, you can buy a Woot Shirt.
LoveFilm
LoveFilm is a British subsidiary of Amazon.com offering movie and video-game rentals by mail (or should I say 'by post'?) and online streaming of movies in the UK, Germany and Scandinavia with a library of more than 70,000 titles. Founded in 2002, LoveFilm is essentially Britain's Netflix. (Netflix was founded in 1997 and serves the U.S. and Canada.) LoveFilm streams content through a computer, through the Playstation 3 video-game system, or Internet-connected Sony or Samsung TVs, much like Netflix. Build your queue, get your movies, return when you like with no late fees or watch instantly online. My free trial was denied because of the whole distance thing. Don't think I'd qualify for 'free first-class post.'
What LoveFilm offers:
- DVD and Blu-ray by mail
- Streaming instantly to your PC, PS3 or Internet-connected TV
- On-Demand content (pay-per-view)
Sound familiar? Besides the obvious Netflix similarities, it's essentially what Amazon just rolled out as a bonus to its Amazon Prime membership. Minus the discs by mail. But, hey, I wouldn't be surprised if Amazon started renting discs by mail. What better a way to make money from older movies nobody wants to buy from Amazon.com? Rent them through Amazon.com.
Amazon has had ownership stake of LoveFilm since 2008, but it wasn't until January of this year that Amazon took full control of the company. And in February, Amazon announced its Amazon Prime members would have access to Instant Video content, streamed to their PC or a number of TV-connected devices.
Could LoveFilm set up shop in the U.S.? Former LoveFilm COO William Reeve thought it could compete with Netflix, but reportedly didn't receive the backing from LoveFilm venture capitalists. Reeve left LoveFilm in 2008, before Amazon was a part of the plan. Now that Amazon's in full control, would it bring LoveFilm over and risk competing with, well, itself?
What's next?
Amazon is claiming stake in every conceivable digital media category. Including rumors within the last two days of an NFC-based mobile payment service. (NFC stands for Near Field Communication, a short-rage wireless service that allows NFC-equipped cell phones to pay for items at brick-and-motor stores without a debit or credit card, just using a phone.) The NFC tech talk is just another way Amazon is moving with technology and moving in on competitors. Smart business strategy by CEO Jeff Bezos.
I'd watch for more acquisitions. Amazon's made a habit of acquiring companies and rolling them into Amazon's umbrella of services.
Amazon reported net sales of more than $34 billion in 2010 (up from 24.51 in 2009) and net income of $1.15 billion. International sales, representing Amazon's UK, German, Japanese, French, Chinese and Italian services were $5.74 billion, according to the company's financial statements, up 26% from fourth quarter 2009.
Two sectors where I predict growth for Amazon in 2011: Social Networking and Instant Video.
SOCIAL NETWORKING
Just putting pieces of this Amazonian puzzle together: Amazon Prime members, Audible.com, Mobile, Instant Video and a growing list of services. Watch for Amazon to roll out a social network of sorts, not a Facebook competitor by any means maybe just a mobile or TV hub that connects all Amazon members (and its subsidiaries). You'd be able to see what your friends are watching instantly, or what items they've rated on Amazon.com, What they're listening to from Audible.com (opt-in, of course).
In 1998, Amazon acquired PlanetAll, which was one of the first online attempts at social networking. PlanetAll connected users with classmates and colleagues as well as providing calendars, address books and groups all in one service. Amazon shut it down in 2000, however, and absorbed part of the PlanetAll service into its Friends and Favorites area where customers can set up 'wish lists' and share them with friends. But Amazon got the social-networking fever again in 2008 and filed another patent for a "social networking service."
In June of 2010, The United States Patent and Trademark Office awarded Amazon with a patent for a social networking system, the one it filed for in 2008. I don't see them sticking with the PlanetAll title if it's re-introduced. I imagine they'll roll it into the Amazon name and connect it with all of Amazon's services and subsidiaries. The trademark office lists the Inventors of this patent as Brian Robertson and Warren Adams, the founders of PlanetAll.
The verbiage from The United States Patent and Trademark Office, Patent No. 7,739,139
Social networking system
A networked computer system provides various services for assisting users in locating, and establishing contact relationships with, other users. For example, in one embodiment, users can identify other users based on their affiliations with particular schools or other organizations. The system also provides a mechanism for a user to selectively establish contact relationships or connections with other users, and to grant permissions for such other users to view personal information of the user. The system may also include features for enabling users to identify contacts of their respective contacts. In addition, the system may automatically notify users of personal information updates made by their respective contacts.
Instant Video
I'd watch for Amazon Instant Video to bulk up its offerings. I'm going to keep an eye on LoveFilm. LoveFilm is similar to Netflix in operation, pricing and even layout and iconic red packaging. With one key difference. In LoveFilm's £14.99 plan (about $24), the service offers unlimited Movies, TV and Video Games by mail. A comparison here would be pairing Gamefly with Netflix. I'd love for Amazon to incorporate this into its Amazon Prime membership, as part of new tiered membership options.
One final prediction: How about Amazon acquiring a company that makes streaming devices? Amazon could then sell the box at a discount with an Amazon Prime membership or even give it away with an annual membership to Amazon Prime.
If Amazon's history is any indication of its future, watch for the company to continue expanding its services, moving into new industries and increasing its user base.
Amazon CEO Jeff Bezos has shown no hesitation to enter a new industry. That makes Amazon an exciting company to follow and, from a competitor's standpoint, one to be afraid of.
